41 cents! The fate of millions is still unknown

INVESTORS in Coffs Harbour company LKM Capital can expect to see a 'small' amount of their investment returned by December, but the fate of millions of dollars in debentures is still unknown.

A report by receivers Ferrier Green Krejci Silvia found that $26.128 million of LKM's assets will be recoverable in full, which equates to a return of 41 cents in the dollar to debenture issuers. However, the receivers won't speculate on the recoverability of a further $28.805 million.

“At this stage we are unable to provide an accurate assessment of the likely return as we are still waiting on a number of documents,” receiver Andrew Cummins said in the report. “Our initial investigations do reveal that $7.750 million in assets will not be recovered, which means debenture holders are likely to lose at a minimum 12 cents in the dollar.”

Mr Cummins said they hope to pay a small first distribution to debenture holders in late December.

While exact details of LKM Capital's assets cannot be disclosed, the company has eight outstanding loans ranging from $524,000 to $15 million, five properties held for development or land subdivision, two properties in Joint Venture Unit Trusts where LKM holds a minority stake, and control of 70 per cent of Odyssey Gaming Limited. Odyssey holds a license in Queensland to monitor poker machines for the government and currently has a market capitalisation of $2 million.

LKM also owns four retirement villages but receivers are yet to receive valuations.

Mr Cummins said it is not the receivers' intention to 'fire sale' any of LKM's assets. “Once we have received all the information and completed our feasibility studies, we will provide investors with ... estimates of the anticipated return,” he said.

A further report on potential distributions, a timetable of payments and details of a debenture holders meeting will be released in approximately two months.